My property has a short lease. Can I acquire a mortgage?
December 19th, 2016
For leasehold properties, mostly flats, apartments and maisonettes, a short lease can make sourcing a mortgage on the property more difficult. A lease term lower than 60 years is deemed as short.
As a rule, properties with shorter leases can negatively affect the property value as the property may be entirely unmortgagable and therefore can only be purchased in cash. Plus acquiring a new lease from the freeholder is seen as another cost to any potential purchaser which could be seen as off-putting.
The 1993 Leasehold Reform Act usually means that 90 years can be added to a lease at a fair price.
It is not only mortgages for purchases than this affects, if you already own a leasehold property and you wish to remortgage it as the occupier or landlord, the lease term will be brought into consideration at the mortgage underwriting stage of the process.